Economics Quiz 29.03.2021

In 2012 the local government of a city decided to increase parking charges for motorists. It was intended to raise money to correct a deficit in the local government’s budget. The local government said if they did not increase charges they would not be able to provide all their current services. Businesses complained about the likely loss of revenue if parking charges were increased. Which concepts does this statement involve?

A inflation and the private sector

B opportunity cost and public expenditure

C private benefit and the free market

D unlimited resources and a centrally planned economy

• A

• B

• C

• D

What is a factor of production?

A a semi-skilled, young worker

B direct taxes received by a government

C shares in a manufacturing company

D stocks of money held a bank

• A

• B

• C

• D

How is an immediate effect of an increase in unemployment illustrated on a production possibility curve diagram?

A a movement of the production point closer to the curve

B a movement of the production point further inside the curve

C a shift of the production possibility curve inwards

D a shift of the production possibility curve outwards

• A

• B

• C

• D

What is most likely to reduce the supply of factors of production in an economy?

A increasing the age of retirement

B introducing new methods of irrigation

C lowering the cost of borrowing from banks

D raising the rate of tax on profits

• A

• B

• C

• D

A large shop selling clothes opened in a town. Its prices were much cheaper than other shops selling similar items. As a result many more customers came to the area. They also visited restaurants near the shop. The restaurants reported a 10% increase in sales. What economic concept does the above statement best illustrate?

A external benefit

B inelastic demand

C market failure

D perfect competition

• A

• B

• C

• D

The government of a country with a rapidly increasing population decides to switch resources from investment to increased subsidies to farmers. What is the opportunity cost of this decision?

A the profit earned by farmers

B the rent of the land on which food is grown

C the reduction in investment

D the wages of the farm workers

• A

• B

• C

• D

A boat owner employs a crew to catch fish to sell on the market. Which factors of production are involved in this activity?

A labour, capital and enterprise only

B land, labour and capital only

C land, labour and enterprise only

D land, labour, capital and enterprise

• A

• B

• C

• D

What is the most likely outcome of increased specialisation in a water bottling plant?

A higher costs per bottle

B higher wage rates

C increased job satisfaction

D increased output of bottles of water

• A

• B

• C

• D

In 2001 some countries, including India and Pakistan, criticised the European Union for continuing to protect European farmers with a subsidy while expecting poorer African countries not to restrict trade. Identify the concepts that are not involved in this situation.

A developing and developed economies

B free trade and protection

C market prices and official intervention

D multi-nationals and public corporations

• A

• B

• C

• D

A bus company knows that demand for travel before 09 00 hours is inelastic and that after 09 00 hours it is elastic. How is the company certain to increase total revenue?

A by increasing all fares

B by increasing fares before 09 00 hours

C by reducing all fares

D by reducing fares before 09 00 hours

• A

• B

• C

• D